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PPSEZ plans bookbuild for scaled-back IPO

PPSEZ plans bookbuild for scaled-back IPO

Phnom Penh Special Economic Zone (PPSEZ), the private firm that operates Cambodia’s most developed industrial park, will hold a bookbuild for investors later this month for an initial public offering it hopes will raise up to $11.6 million for expansion and debt repayment, according to a company report circulating among potential investors.

PPSEZ plans to float nearly 11.6 million new shares, representing a 20 per cent stake in the company, on the Cambodia Stock Exchange (CSX) in February, the report obtained by the Post said.

Institutional investors will be invited to participate in a bookbuild starting December 28 to determine the share price, with the price band set between 2,850 riel ($0.70) and 4,050 riel ($1) per share.

This would generate between $8.1 million and $11.6 million gross proceeds for the company, implying a market capitalisation of between $40.5 million and $57.8 million.

About 40 per cent of the IPO shares will be distributed to strategic investors ready to invest at least $10,000. Another 42 per cent allocated to institutional investors and the remaining 18 per cent for retail investors, the report said. Subscription is expected to run from January 29 to February 4, with the stock to be listed on the CSX on February 23.

All prices and dates are preliminary ahead of SECC-approved disclosure documents expected to be released later this month.

Svay Hay, CEO of Acleda Securities, said PPSEZ’s listing on the CSX would help diversify the exchange’s stock mix, which is currently limited to just two listed companies – the state water utility and a private garment manufacturer. State-owned port operator Phnom Penh Autonomous Port (PPAP) is scheduled to list next week.

“It’s good news that not only state-owned enterprises are listing in the market, but also more private firms are coming,” he said.

PPSEZ operates a 357-hectare industrial park on the outskirts of the capital that has secured nearly 80 tenants, about half of them Japanese firms.

The company generates revenues from the sale or lease of land, as well as the rental and servicing of facilities and infrastructure. PPSEZ generated nearly $23.4 million in revenue last year, up from $16.7 million in 2013 with 33 per cent CAGR over three years, according to a financial statement.

Funds raised by the IPO will be used foremost to acquire new land around the company’s flagship industrial park and cover development of a new 53-hectare special economic zone in Poipet. A portion will be allocated to servicing debt and financing day-to-day operations.

PPSEZ previously announced its intention to raise over $15 million in the share offering, but appears to have trimmed its valuation and moved back the timeline in response to PPAP’s oversubscribed $5.2 million IPO last month.

Fong Nee Wai, chief financial officer of PPSEZ, said last month that the two IPOs were targeting the same pool of investors, which could impact his company’s ability to raise funds.

“Some of our potential investors will be taken away from our pool of targeted investors . . . as PPAP’s IPO was ready before ours” he said.

But with shares priced at under $1 Acleda’s Hay reckons the PPSEZ offering will appeal to prospective investors.

“The price is relatively low compared to the trend in the market, and investors with a value and income approach would be interested in this offering,” he said.

Campu Securities, the lead underwriter of the IPO, could not be reached for comment yesterday.

A previous version of this article omitted the word "million" from PPSEZ's revenue: it is $23.4 million, up from $16.7 million.

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